China targets bank executives' perks in anti-corruption drive

Reuters Staff

3 Min Read

BEIJING (Reuters) - China will ban executives from state-owned banks and financial companies from spending extravagantly on cars and houses, state news agency Xinhua said, in Beijing’s latest effort to clamp down on corruption and official waste.

The 12 regulations, issued jointly by the Ministry of Finance, the Ministry of Supervision and the National Audit Office, come after Communist Party chief Xi Jinping warned that the party risks major unrest and the collapse of its rule if corruption is allowed to run wild in China.

They also come amid growing public anger over widespread graft.

China is sensitive to anything that raises suspicions of corruption, especially after the scandal involving former high-flying politician Bo Xilai and his wife Gu Kailai overshadowed the run-up to last week’s once-a-decade leadership transition.

Bo was expelled from the party this year and faces possible charges of corruption and abuse of power, while his wife was jailed for involvement in the murder of a British businessman.

The new rules, which will take effect in December, stipulate that the representatives from state-owned banks or financial institutes belonging to the central government must stay within the guidelines of spending allowed on cars, Xinhua said.

Many Chinese banking executives often use luxury cars for official and private use.

The rules also prohibit these executives from “using public funds to pay for the individual’s residential purchases, residential renovations, property management fees and so on”, according to Xinhua.

The government also said executives from these companies were not allowed to violate guidelines for using public funds to accumulate “high expenses for entertainment activities”, Xinhua said.

China earlier imposed a “frugal working style” rule on its civil servants, which went into effect on October 1, barring them from spending public money on lavish banquets or fancy cars, and from accepting expensive gifts.

A string of high-profile incidents, including a high-speed Ferrari crash reportedly involving the son of a senior public official and a local government official photographed flaunting luxury watches beyond the reach of his salary, have enraged many Chinese who have taken to the Internet to vent their anger.